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[2010] ZALCJHB 368
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Hlongwane v Cisco Systems South Africa (Pty) Ltd and Another (J486/107) [2010] ZALCJHB 368 (16 September 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
Reportable
Case
No:
J486/07
In
the matter between:
XOLANI
HLONGWANE
Applicant
And
CISCO
SYSTEMS SOUTH AFRICA
(PTY)
LIMITED
1
st
Respondent
CISCO
SYSTEMS INCORPORATED
2
nd
Respondent
JUDGMENT
Molahlehi
J
Introduction
[1]
In the initial motion proceedings filed in
terms of s77(3) of the Basic Conditions of Employment Act 75 0f 1997
(the BCEA), the
applicant sought a declaratory order declaring the
applicant to still be in the respondent’s employ and compelling
the respondents
to accept the tender of his services made on 11
December 2006. The applicant further sought to have the respondents
compensate
him from 31
st
October 2006 as if he had remained in the respondents’ employ
from the date of termination of his contract of employment.
[2]
On the 18
th
April 2008, Cele AJ, as he then was, ordered that the dispute between
the parties should be referred to oral evidence and further
that the
papers which had been filed in the motion proceedings should serve as
pleadings.
[3]
The issue for determination arising from
the pleadings and the evidence presented by the parties is whether or
not the employment
of the applicant with the respondents was
terminated pursuant to the terms of a settlement agreement
purportedly concluded between
the legal representatives of the
parties. The settlement agreement was orally concluded between
Stransham-Ford (Ford), the erstwhile
counsel of the applicant and Mr
Mills (Mills), attorney of the respondents.
[4]
The applicant contends that the alleged
settlement agreement is not binding on him for the following reasons:
a.
He never authorized his erstwhile attorneys
to conclude the agreement on his behalf.
b.
He did not sign the “Heads of
Agreement” which purported to incorporate the essential terms
of the agreement.
c.
No consensus was reached between the
parties regarding a mutually agreeable termination of the contract of
employment.
[5]
The respondents on the other hand contended
that a valid and enforceable oral agreement was concluded with the
applicant represented
by his erstwhile attorneys. The respondent
further contended that the applicant is estopped from denying the
authority of his legal
representative to conclude the oral agreement.
The “Heads of Argument” was a mere formality intended by
the parties,
according to the respondents to serve as proof of the
terms of the settlement.
The
parties
[6]
The applicant is a former employee of the
first respondent who prior to his dismissal was employed as a
business development manager.
The first respondent is the subsidiary
of the second respondent, registered in terms of the company laws of
South Africa and carries
its business of supplying network equipment
and management for the internet in the world and is based in
Johannesburg. The second
respondent is a global company listed in the
Nasdaq Stock Exchange in the United States of America.
Background
facts
[7]
During June 2006, the applicant lodged a
complaint about misappropriation of the second respondent’s
funds in South Africa.
The complaint was later elevated to Mr De
Simone and Mr Mountford, with a threat of litigation and media
exposure of the issue
complained about. The other details concerning
the complaint of the applicant are set out in the judgment of my
brother Cele AJ
which referred this matter to oral evidence. I do not
deem it necessary to repeat those details in this judgment.
[8]
It is apparent that the first respondent
was not happy with the applicant pursuing his complaint with the
second respondent. A meeting
was accordingly convened on the 24
th
July 20006, to discuss the applicant’s continued communication
with the second respondent.
[9]
On the 24
th
July 2006, the applicant was suspended and thereafter charged with
misconduct after failing to heed the warning not to communicate
with
people outside South Africa. During the same period the applicant
made a protected disclosure.
[10]
Mr Mills (Mills), the respondent’s
attorney, was appointed to conduct an investigation into certain
allegations made by the
applicant. The applicant complained that the
charges against him were a form of retaliation against his protected
disclosure which
he had made to Mr Marenberg (Marenberg) and the
disciplinary inquiry would be automatically unfair.
[11]
As a result of this conflict that has
arisen between the parties a possible mutual separation package was
discussed between Mills
and the applicant at a meeting which was
convened subsequent to the charges against the applicant being
proffered. And subsequent
to this the two had a further discussion
regarding mutual separation. During those discussions the applicant
advised that his attorney
of record would be in touch with Mills
regarding the same.
[12]
During September 2006, the attorney of the
applicant, Mr Hardie (Hardie) had a discussion with Mills regarding
possible settlement
of the matter. Mills indicated that the
respondent was looking at a settlement of between 6 (six) and 12
(twelve) months’
remuneration. It is import, although not
directly relevant to the issue in dispute, to note that the
investigation and the settlement
discussions ran parallel to the
preparations for the disciplinary inquiry against the applicant.
[13]
On the 11
th
September 2006, Hardie made an offer of settlement in an amount
equivalent to 10 (ten) moths salary, on condition the disciplinary
enquiry against the applicant was withdrawn.
[14]
It would appear that the applicant was not
happy with the advice of Hardie to accept the offer of 10 (ten)
months and for this reason
approached another attorney- Mr Casasola
(Casasola). The applicant was attracted to the radical advice of
Casasola who had advised
that he could, working with Ford as counsel,
secure a settlement of up to R6 million for the applicant and do that
as quickly as
possible.
[15]
In the mean time Mills reverted back to
Hardie with an offer of payment equivalent of 7 (seven) moths salary
and offered to revert
back in as far as the issue of shares were
concerned. However, about a week thereafter Casasola contacted Mills
and indicated that
he was representing the applicant and further that
he was keen to have a meeting to discuss a possible settlement of the
matter.
On the same day that Casasola contacted Mills the applicant
wrote a letter Hardie in which he stated the following:
“
I
Xolani Hlongwane terminate all your services as my legal
representative as of today, 27
th
September 2006.
I request that you
therefore stop all communication with Cisco Systems and /or any of
Cisco Systems representatives.
Thank you for all the
assistance gave me thus far.”
[16]
After the initial contact between Mills and
Casasola a meeting involving the legal representatives and the
applicant was held on
17
th
October 2006. At this meeting Mills tabled again the offer of
compensation equivalent to 7 (seven) months salary and promised to
revert back as concerning the issue of shares. Mills reverted back to
Casasola the following day and confirmed the offer of 7 (seven)
months including vested stock options. Casasola undertook to revert
back to him shortly after. However, instead of Casasola, Ford
reverted back to Mills with a settlement offer of remuneration
including both vested and unvested shares. That offer was rejected
by
the respondent.
[17]
The applicant was clearly unhappy with this
offer by the respondent. He expressed his frustration and anger in a
long letter which
was sent to Mills via a covering letter from Ford.
The letter deals with both the details relating to the investigation
which Mills
was to conduct, the history thereof and all the efforts
at mutual separation settlement proposals. Towards the end of that
very
lengthy letter the applicant warns Mills in the following terms:
“
.
. . there will be consequences for your continued and
deliberate faltering. Needless to remind you that I have been
humiliated,
my character defamed in this process, labeled a
whistleblower by the media and unjustly accused by Dr Fynn, this has
resulted in
financial and emotional damages, which we have the to
appropriately deal with in a court of law.”
[18]
In the same letter prior to issuing the
above warning to Mills the applicant places a deadline of the 24
th
October 2006 for the respondents to do the following:
“
1.
Discontinue procedurally unfair practices
2.
Desist from using cheap tactical
methods of a DC threat
3.
Nullify the suspension and
disciplinary hearing
4.
Engage with us for a way forward in
an honest manner so we can solve the impasse amicably.
[19]
Another threat to the respondents is
contained in the covering letter of Ford. In that letter Ford inter
alia states:
“
3
I am further instructed to inform you that Mr Hlongwane has declared
his intention to refer Cisco’s
conduct to the American Justice
Department and Securities Exchange Commission as well as Media
Investigatory and Regulatory Authorities
in England and South
Africa.”
[20]
The following the day after the above
deadline, being the 25
th
October 2006, Mills sent the notice of the disciplinary hearing which
was to be convened on the 27
th
October 2006 to Casasola. In the afternoon of the same day the
applicant sent a fax to Casasola and Ford in preparation of the
discussion he was planning to have with Cisco USA. The applicant had
planned to inform Cisco USA about the discussion he had with
the
Department of Trade and Industry which he did following the advice he
got from Ford.
[21]
At about 20h00, on the same day the
applicant sought to contact two of the senior members of Cisco USA.
His attempts failed as he
only received a massage from the PA
indicating that he should expect a response from the office of Mills,
the person he was seeking
to avoid and sideline in as far this matter
was concerned. And 30 (thirty) minutes after the applicant failed to
reach the seniors
of Cisco USA, Ford phoned Mills and indicated to
him that Cisco would be destroyed unless the applicant was paid
$2million.
[22]
The same evening and again about 30 minutes
after the applicant’s call to Cisco USA, Mills contacted Ford
and informed him
that the respondent will not be extorted. At about
21h33 Ford sent an email to both Casasola and the applicant
indicating that
Mills has advised that the respondent was not willing
to settle at US$2million.
[23]
On the 26 October 2006, Mills and Ford had
further telephonic discussions regarding the settlement of the
dispute. During that telephone
discussion a settlement, was according
to Mills, reached. The matter was settled, says Mills on the terms
confirmed in the letter
addressed to him by Ford dated 26 October
2006. The relevant part of that letter reads as follows:
“
2.
I am authorized to indicate that Mr Hlongwane will accept offer of
settlement on the terms to this effect:
2.1
Payment net of tax eight months
optimized ote (sic) earnings plus the value of perquisites normally
attributable thereupon.
2.2
Receipt of the liquidated value in
zar of shares vested up to the signature date.
2.3
A contribution to legal fees of ten
percent of the above amount which sum will be paid separately into
the attorney’s trust
account
2.4
Due assistance with referees and
procumbent of future employ.
3.
This document upon signature to serve as heads of agreement in
pursuance of 2 above.”
[24]
Mills testified that it was on the basis of
the above letter that the employment contract of the applicant was
terminated.
[25]
The applicant contends that the termination
of his contract of employment with the respondent was invalid. In
this respect he challenged
the validity of the agreement which his
counsel, Ford concluded with the respondent’s attorney- Mills.
The essence of his
challenge is that Ford did not have his
instructions to compromise his claim which was more than US$ 2
million.
[26]
The applicant further contents that if the
agreement was found to have been mandated, it was inchoate because it
was not signed
by all the parties as provided for in the letter of
Ford to Mills. The other point raised by the applicant is that the
agreement
did not provide for the date of termination of the
employment relationship between the parties.
Issues
for determination
[27]
The issues arising from the pleadings and
the evidence presented are mentioned earlier in this judgment. For
the purposes of evaluation
the issues for determination are further
summarised as follows:
a.
Did Ford have authority to compromise the
applicant’s settlement demand by concluding an oral agreement
with Mills?
b.
If found that Ford was authorised to
conclude the agreement on behalf of the applicant, was that agreement
inchoate because the
settlement letter:
i.
did not contain a date for the termination
of the employment contract of the applicant.
ii.
was not signed by the applicant or Mills.
c.
Was a written agreement precedent to a
settlement and what were the consequences of the brake down then in
then negotiations?
Authority
of counsel or attorney to settle on behalf of client:
[28]
It is generally accepted in our law that
counsel or an attorney has the authority to compromise a client’s
claim unless the
client has instructed otherwise. See
Hlobo
v Multilateral Motor Vehicle Accident Fund
2001 (2) SA 59
(SCA)
[29]
In
Dlaminin
v Minister of Law and Order
1986 (4) SA 342
(D) at 346 I to 347A,
the
court held that
“
At
the outset of the hearing before me, Mr Farlam, who appeared on
behalf of the applicant, indicated that the applicant contended
that
the matter had been settled, that the respondents were bound by the
settlement and could not withdraw from the settlement
and that
accordingly, and if he was correct in this, those matters to which
the oral evidence would otherwise relate would become
academic,
insofar at any rate as the resolution of this particular application
is concerned. He therefore asked me to decide in
limine whether or
not the respondents could withdraw from the settlement, admittedly
concluded by counsel briefed on their behalf
by the Deputy State
Attorney in Durban."
.
The
court went further to say:
“
The
settlement, which was arrived at, was arrived at by counsel and
attorneys purporting to act on behalf of the respondents. It
would
seem to be reasonably clear that counsel, who had been properly
instructed to appear on behalf of a litigant, has implied
authority
to conclude a settlement or compromise of the litigation on behalf of
his client provided he acts bona fide in the interests
of his client.
This proposition appears to be well entrenched in England. Perhaps
the earliest leading case on the subject is the
decision of the Court
of Appeal in the case of Matthews and Another v Munster
(1887) 20 QB
141
(CA) ((1886 -
90) All ER Rep 251).
In that case counsel, acting
on behalf of the plaintiffs, had settled an action for malicious
prosecution on behalf of his clients
with counsel for the defendant.
The defendant had not been present when the settlement was arrived at
and, on coming to Court later,
endeavoured to repudiate the
settlement. It was held, however, that although the defendant was not
present when the settlement
was made he had not put an end to the
relationship of advocate and client which existed between himself and
his counsel, that his
counsel had complete authority in the case and
that he, the defendant, was bound by the settlement.”
[30]
The
Dlamini’
s
case was followed in
Ivoral
Properties (Pty) Ltd v Sheriff, Cape Town AND Others
2005 (6) SA 96
(C)
, where the court in dealing
with the issue at hand, in the middle of paragraph [69] of that
judgment had the following to say:
“
[69]
…It appears to be self-evident that any attorney's mandate may
be so widely formulated that it includes, either expressly
or by
implication, authority to enter into a settlement agreement on behalf
of his client (see Goosen v Van Zyl
1980 (1) SA 706
(O) at 709F).
South African courts have followed a well-established approach in
English law, namely, that counsel properly instructed
to appear on
behalf of a litigant has implied authority to conclude a settlement
of the litigation on behalf of his or her client,
provided that he or
she acts bona fide in the interests of the client and not contrary to
specific instructions.”
[31]
It is clear from the above authorities that
in the absence an instruction to the contrary by a client, a counsel
or an attorney
has implied authority as between himself or herself
and the client to compromise the client’s claim. The other
principle
is that counsel or attorney of a client has ostensible
authority as between himself or herself and the other party to settle
or
compromise a client’s claim without the need of actual proof
of the existence of such authority.
[32]
It is apparent from the evidence before
this court that there two conflicting versions concerning whether or
not the applicant authorised
both Casasola and Ford to settle the
matter on his behalf. It therefore follows that in resolving that
dispute of fact this court
is faced with having to resolve it either
by weighing the probabilities or assessing the respective party’s
case on the basis
of credibility of their respective witnesses.
[33]
The applicant in the presented case was
confronted with a number of difficulties in convincing this court
that his then attorney
and counsel did not have the authority to
compromise his claim of US$2 million against the respondent or could
not have settled
the matter whilst he was ostensibly busy negotiating
with Cisco USA. In this respect it is important to note that the
applicant
did not call either Ford or Casasola to lead evidence in
support of his version. The applicant failed to call as witnesses
Casasola
and Ford not only in the face of denying their authority to
compromise his claim but also in the presence of documentary,
including
file notes from of them supporting the version of the
respondent. This point is made taking into account and accepting that
some
of the documentation may be hearsay evidence. That documentary
evidence was accepted as such and accorded weight they deserved not
because they were submitted for the purpose of proving a fact but
rather to support the version of the respondent that firstly
an oral
agreement was concluded and secondly it was concluded with proper
authority on the part of the applicant. In this respect
it can
reasonably be assumed that the applicant did not call his former
legal representatives for fear that they would have given
a different
version to his and in all probabilities supported the version of the
respondent.
[34]
The most important reason why the applicant
ought to have called Ford to testify on his behalf relates to the
evidence of Mills
that he had a telephone conversation with him
(Ford) on the 27
th
October 2006, wherein the authority to settle was confirmed. It is
also important to note that the applicant could not comment
when
asked to do so regarding the SMS which Ford had sent him on the same
day informing him that the respondent had withdrawn the
disciplinary
enquiry on the basis of the settlement agreement.
[35]
In my view, in the circumstance of this
case and having regard to the background of how Ford came into the
picture, the meeting
between the parties, response of Ford on behalf
of the applicant to the first offer of settlement made by the
respondent and telephone
call between Ford and Mills on the 27
th
October 2006, there is no basis for the respondent to have had any
reason to doubt the authority of Ford to settle the matter on
behalf
of the applicant. This fact taken together with the engagement
between Mills on the one hand and the applicant, Ford and
Casasola on
the other hand, leads to the conclusion that there exist overwhelming
probability that there was ostensible authority
as between Mills on
behalf of the respondent and Ford on behalf of the applicant to
compromise their respective clients’
claims without actual
proof thereof.
[36]
Although the applicant contends that Ford
or Mills for that matter was aware that he was still negotiating with
Cisco USA at the
time they concluded the agreement that does not
detract from the existence of either ostensible or implied authority.
It is not
uncommon for the engagement in the negotiations process to
take place at various levels and for that to happen concurrently. The
principals may for instance whilst retaining and using the services
of their negotiating representatives engage each other at a
different
level for various reasons. The one reason may for instance be with
the objective of either unlocking a deadlock or clarifying
certain
issues that may have developed between their negotiating teams. In
the absence of an express or implied indication otherwise,
the
parties are entitled to assume implied authority on the part of the
negotiators of the other side without having to require
proof thereof
before concluding a binding agreement.
[37]
In the first instance the issue of whether
Ford had authority to settle on behalf of the applicant must be
understood in the context
where the applicant was not an
unsophisticated person who lacked knowledge and understanding as to
when, why and how the authority
of a lawyer can be terminated. He had
earlier before instructing Casasola to assist him formerly and in
writing withdrew his instruction
from Hardie, his present attorney of
record. The issue of terminating the mandate with Hardie was that the
applicant was not happy
with his advice on areas of possible
settlement of his matter with the respondent. The applicant’s
sophistication is also
evinced by his understanding of the need for a
strategy when engage in negotiations. He knew that a successful
negotiated outcome
entails a clear strategy, not only how to approach
the issues but more important how to build on the dynamics within the
role players
of the other party to the negotiation process. It seems
to me that the applicant was of the view that he could leverage his
negotiations
power by engaging with Cisco USA and not the respondent
or for that matter Mills. It would appear his strategy was to
marginalise
Mills in the negotiations process.
[38]
There is nothing in law nor in practice, as
far as I am aware, that says a party can determine the choice of the
other party’
negotiating representative. In the present
instance the respondent had appointed Mills as its attorney and
negotiating representative.
The applicant had no choice but to engage
with respondent through him. The facts before this court even on the
version of the applicant
indicate very clearly that negotiations
never took place between Cisco USA and the applicant. It is however
clear that the applicant
sought to have the negotiations elevated to
that level and have, as stated earlier, Mills marginalised in the
process.
[39]
I have earlier indicated that I am
confronted in this matter by two conflicting versions. The one
version is that an agreement mandated
by the applicant was concluded
with the respondent, whilst the other hand the version is that that
agreement was not authorised
by the applicant.
[40]
The approach to be adopted in resolving
disputes of facts in trial matters was dealt with in the case of
Stellenbosch Farmers' Winery Group
Ltd and Another v Martell ET CIE AND Others
2003 (1) SA 11
(SCA).
In that case Nienaber JA in dealing with what approach to adopt when
faced with two irreconcilable versions had the following to
say:
“
.
. . The technique generally employed by courts in resolving
factual disputes of this nature may conveniently be summarised
as
follows. To come to a conclusion on the disputed issues a court must
make findings on (a) the credibility of the various factual
witnesses; (b) their reliability; and (c) the probabilities. As to
(a), the court's finding on the credibility of a particular
witness
will depend on its impression about the veracity of the witness. That
in turn will depend on a variety of subsidiary factors,
not
necessarily in order of importance, such as (i) the witness' candour
and demeanour in the witness-box, (ii) his bias, latent
and blatant,
(iii) internal contradictions in his evidence, (iv) external
contradictions with what was pleaded or put on his behalf,
or with
established fact or with his own extracurial statements or actions,
(v) the probability or improbability of particular
aspects of his
version, (vi) the calibre and cogency of his performance compared to
that of other witnesses testifying about the
same incident or events.
As to (b), a witness' reliability will depend, apart from the factors
mentioned under (a)(ii), (iv) and
(v) above, on (i) the opportunities
he had to experience or observe the event in question and (ii) the
quality, integrity and independence
of his recall thereof. As to (c),
this necessitates an analysis and evaluation of the probability or
improbability of each party's
version on each of the disputed issues.
In the light of its assessment of (a), (b) and (c) the court will
then, as a final step,
determine whether the party burdened with the
onus of proof has succeeded in discharging it. The hard case, which
will doubtless
be the rare one, occurs when a court's credibility
findings compel it in one direction and its evaluation of the general
probabilities
in another. The more convincing the former, the less
convincing will be the latter. But when all factors are equipoised
probabilities
prevail”
[41]
The objective facts and the circumstances
of this case militate against the version of the applicant that
Casasola and Ford did
not have the authority to settle the dispute on
his behalf. This analysis must also be understood in the context
where under pressing
cross examination the applicant conceded that at
the time Ford and Casasola had a general mandate to represent him .My
understanding
of the applicants case is that they did not have the
specific mandate to conclude the agreement because they were aware as
indicated
earlier that he was busy negotiating with Cisco USA. I
earlier found that although the applicant may have wished to have the
negotiations
happening at that level they never did. Even on the
applicant’s version the negotiations never took place between
him and
Cisco USA. There is no doubt that his wish and endeavour was
to have the negotiations take place at the level of Cisco USA and
they be with Murenberg.
[42]
I am thus satisfied on the basis of the
evidence before me that the probabilities support the version of the
respondent that an
oral agreement was concluded with Ford and further
that he was authorised to so by the applicant. The version of the
applicant
that he did not mandate Ford to conclude the agreement on
his behalf further stands to fail on the basis of credibility.
[43]
The applicant was with due respect to him,
profoundly a poor witness to say the least. It would appear he came
into the witness
stand having considered and strategized as to what
his testimony was going to be irrespective of whatever questions are
asked to
him. His strategy seems to have been that the truth is only
what favours his case and would not change his stand irrespective of
questions or versions put to him. His strategic approach was to deal
with difficult questions or those whose underlying purpose
was to
seek to undermine his case by way of bringing in some points
unrelated to the questions. He was indeed a man loyal to his
strategy
but at times seems to have failed to understand the difference
between strategy and tactics. He is a man not to be trusted
with the
truth and thus anything in his version that purports to be the truth
has to be evaluated against all probabilities before
it can be
accepted as such. As I listened and observed his mannerism seating in
the witness stand, I wondered whether he seriously
believed in his
own story. He frequently laughed when questioned during cross
examination, something he did not do much of, if
at all, during
evidence in chief or re-examination.
[44]
It was also apparent during cross
examination that the applicant evaluated every question put to him
with the view to determining
the underlying purpose before he could
answer. This approach manifested itself more particularly when
dealing with questions related
to the authority given to Casasola and
Ford to conclude an agreement on his behalf.
[45]
The question asked to the applicant during
cross –examination as to whether he had authorised his legal
representatives to
explore settlement was the most simplest of all.
He seem to have realised in his response that a “yes” or
“no”
answer would “put him into a corner.” He
answered as follows: “
They were my
representatives.”
And when asked
further whether in representing him they were entitled to exercise
their own discretion, he answered as follows:
“
But
not to conclude a settlement, not to conclude without my agreement.”
The applicant did not however, dispute
that in making the settlement offer Ford was exercising a general
mandate given to him.
[46]
In my view, the applicant was such an
unreliable and uncooperative witness that his evidence should be
discarded. It is hard to
belief that the applicant had no knowledge
of the thread which Ford made against Cisco USA. Even if that was the
case and it would
appear the applicant now seek to distance himself
from it, that was the signal of a risk he was running with Ford who
on his version
seems to have been on a frolic of his own in handling
this matter. There is evidence that he never said and suggested to
him that
because of his unbecoming conduct his mandate was to be
curtailed and he could exercise no discretion without reference to
the
applicant.
[47]
The applicant in some way of seeking to
show that after the threat made to Cisco, he lost trust or confidence
in Ford to the extend
that he had to enlist his brother in the
telephone conference he was to have with Cisco USA. It has to be
emphasised that if indeed
the applicant is to be belief regarding the
tactics of Ford why did he not terminated his mandate or at least to
have instructed
him not to do things without his consent or prior
approval. He left Ford as he stated in his testimony with a general
mandate and
in my view, in all probabilities with discretion to
compromise his demand of US$2 million in carrying out that general
mandate.
[48]
The issue of the mandate to settle the
matter for and or behalf of the applicant is made much clearer by the
e-mail he referred
to during his evidence in chief. The e-mail which
was sent to him by Casasola on the 25 October 2006, the relevant
parts of which
read as follows:
“
CISCO
SYSTEMS (CISCO) XOLANI HLONGWANE
1.
We refer to the terms agreed upon by
yourself good the writer and Counsel on 21 October 2006.
2.
We will act in your cause to, inter
alia,
2.1
Settle the dispute with Cisco
2.2
Litigate to conclusion
2.3
Deal with external agencies for your
cause. . .”
[49]
The e-mail from Murenberg to Mills dated 26
October 2006 does not retract from the fact that an agreement was
concluded. Murenberg’s
letter simply enquired from Mills as to
what the state of affairs was after Mills told him that an agreement
was concluded and
later to receive information that suggested
otherwise from the applicant. However, what Murenber’s e-mail
confirms is that
at that stage Mills had already informed the
respondent and particular Cisco USA that a settlement had been
concluded.
[50]
The authority of the applicant’s
legal representatives was further confirmed in the letter of 26
October 2006, from Ford to
Mills. The letter records as follows:
“
CISCO
SYSTEMS AND XOLANI HLONGWANE
1.
Mr Hlongwane has asked me to convey
to you his gratitude for your and Cisco’s recognition of his
bona fides in the events
surrounding this matter.
2.
I am delighted to inform you that I
am now authorised to forthwith settle this matter on Mr Hlongwane’s
behalf.
3.
To that may I ask that you telephone on
receipt hereof to finalise matters.”
[51]
The contents of the above letter are
consistent with what Ford further states in his letter to Casasola,
dated 7 November 2006.
In that letter Ford says the following:
“
CISCO
SYSTEMS AND XOLANI HLONGWANE
1.
I note that Mr Hlongwane has
informed you that he intends instructing another attorney,
2.
With respect such a move would in my
opinion be most problematic at this juncture not least for these
reasons.
2.1
Mr Hlongwane mandated me to settle
his dispute on 26 October 2006 on terms contained in my letter to Mr
Mills of Cliffe Dekker.
2.2
This settlement had Hlongwane’s
express approval as to its terms which I communicated in your absence
and with your approval
to messrs Cliffe Dekker in writing.
2.3
You in turn confirmed these terms to
Cliffe Dekker in your letter.
2.4
They were then meticulously
transcribed into an agreement of settlement without derogation except
in a sum of additional R88065-11
for accrued leave.
3.
It is therefore my opinion that it
is not open to Mr Hlongwane now to purport to resile from the terms
expressly agreed.
4.
In my view this should be communicated
explicitly to him forthwith.”
[52]
It is further clear from the e-mail that
the applicant sent to Casasola on 13 November 2006, that the
applicant informed Casasola
that his mandate to represent him was
terminated. The action to terminate the mandate was thus after the
event; as at that stage
the agreement was already concluded.
[53]
The other strange thing about the case of
the applicant is the period he took before reacting to the wrong
which he claims his legal
representatives commitment against him. He
claims to have become aware of what Ford had done only on 30 October
2006, when he collected
his file as from Casasola. This version is
also in serious doubt. He initially denied having seen the letter of
settlement on 26
October 2006. This is such an important aspect of
his case that it would reasonably have been expected that he would
have dealt
with this issue in his founding affidavit. When questioned
about it during cross-examination, he said: “
Yes,
I might be wrong by 30
th . . “
[54]
The applicant’s own version is that
as late as the 6 November 2006 he was still using the services of an
attorney who is alleged
to have concluded an agreement without his
authority. He instructed Casasola to inform Mills that he rejects the
offer and that
he would revert back to him as soon as he has obtained
the services of a labour lawyer.
[55]
The version of the applicant is further
weakened by the file note by Casasola wherein he states that he had a
telephone conversation
with him and informed him as follows:
“
Advice
client that he gave mandate to settle in terms as indicated.”
[56]
The attack on the evidence of Mills during
cross examination suggested that he ought to have been aware that
Ford did not have the
mandate to settle on behalf of the applicant.
This attack is unsustainable if regard is had to the fact that that
version could
only have been challenged and contradicted by
presenting the evidence of either Ford of Casasola. The attack on the
version of
Mills failed to appreciate that the respondent did not
have to show actual authority but ostensible authority was enough. It
can
thus be concluded on the conspectus of the evidence before this
court that all the requirements of estoppel have been satisfied
in
that; (a) representation had been made by words and conduct that Ford
and Casasola had authority to represent the applicant,
(b) the
respondents acted on representation made to them by the applicant,
(c) the applicant should reasonably have expected that
the
respondents as outsider would act on the strength of such
representation; (d) the respondents had relied on such a
representation
in concluding the agreement with Ford and such
reliance was in the circumstances reasonable; and (e) the respondent
would suffer
prejudice if the applicant was at this stage allowed to
withdraw his representation. See
NBS
Bank v Cape Products (Pty) Ltd & others
2002 (1) SA 396
(SCA).
[57]
The next issue to consider having concluded
that an authorized oral agreement was concluded is whether signature
of the letter by
all the parties was a condition precedent to the
agreement becoming binding. The answer to this question has to be in
the negative
regard being had to the unchallenged version of Mills in
that regard. The version presented by Mills is that after concluding
the
oral agreement he requested the applicant’s legal
representatives to put the terms of the settlement in writing as
proof
of the terms of the settlement. Again the only way that the
evidence of Mills could have been contested is if the applicant had
called either Ford or Casasola to testify. To the extent that the
letter of Mills to Casasola dated 9
th
November 2006 may be inconsistent with his version in relation to
this issue, I accept the explanation that the contents thereof
was an
error which occurred when he was trying to reconstruct the events in
relation to the oral agreement. In any event the letter
does not say
that all parties have to sign before the agreement could take effect.
[58]
In my view the parties in concluding the
oral agreement did not make its coming into effect subject to it
being reduced to writing.
The discussion about reducing its terms to
writing was for the purpose facilitating proof the verbal agreement.
See
Goldblatt v Freementle
1920 AD
123
(AD).
In other words it was not
a term of the oral agreement that it would only come into effect once
it was reduced to writing. See
Shaik
& other v Pillay & other
2009 (4) SA 74
(SCA)
.
[59]
The other issue for consideration is what
would have happened had the negotiations over the formal agreement
failed. The answer
in my view has to be in the affirmative regard
being had to the testimony of Mills. The contention by the applicant
that the testimony
of Mills was inconsistent with what was pleaded by
the respondent has no merit. Thus the totality of the evidence
supports the
version that had the parties failed to reach agreement
on the terms of the agreement the oral agreement would have remained
enforceable.
[60]
The final issue is whether or not the
agreement was incomplete without providing for the date of
termination. I again do not agree
with the contention of the
applicant that the agreement was incomplete without making a
provision for the date of the termination.
[61]
In my view it is apparent from the facts
and the circumstances of this matter that the termination term can be
implied into the
agreement. The totality of the facts and the
circumstances of this case indicate very clearly that the date of the
termination
of the employment relationship can be implied into the
agreement. The very essence of the negotiations, which ended with the
oral
agreement, was to provide the basis for separation of the
relationship between the parties. The separation between the parties
occurred when the agreement was concluded and in the circumstances
its reasonable in the absence of an express provision to infer
that
the parties had intended the termination to occur on the 31
st
October 2006.
[62]
In the light of the above discussion I am
of the view that the applicant’s claim stand to fail. Whilst I
note that the applicant
is an individual, I see no reason in law and
fairness why on the facts and circumstances of this case, the costs
should not follow
the results.
[63]
In the premises the applicant’s claim
is dismissed with costs.
Molahlehi
J
Date
of hearing:
29 April 2010
Date
of judgment:
16
th
September 2010
Representation:
For
the applicant:
Mr. S Hardie of Steven Hardie Attorney
For
the respondent: Mr. A T
Myburgh
Instructed
by:
Cliff Dekker
Inc.